Taxation of Estates and Gifts

Conn. Bank & Trust Co. v. United States

United States Court of Appeals for the Second Circuit, 1972

Facts:

Decedent was struck and killed by a semi-truck. His executor commenced wrongful death actions which were settled for $320,000. This money was held for distribution to his beneficiaries not included in the estate for estate tax purposes. However, the Commissioner said it should have been.

Procedural History:

District court held that the wrongful death recoveries were property held by decedents at the time of their deaths, and was therefore part of the estate to be taxed.

Issue:

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The crucial issue to be decided under § 2033 is whether or not the value of an action for wrongful death is "property . . . of the decedent at the time of his death."

Judgment:

Reversed and remanded.

Reasoning:

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Simple logic mandates the conclusion that an action for wrongful death cannot exist until a decedent has died, at which point, he is no longer a person capable of owning any property interests.

Rule/Holding:

Wrongful death proceeds are not property of the decedent at the time of his death.